Convert between markup and margin percentages, and calculate selling price, cost, and profit.
This calculator provides estimates for pricing guidance only. Actual margins may vary depending on additional costs, taxes, and market conditions.
Markup and margin are two of the most commonly confused concepts in business pricing. Both describe the relationship between cost, selling price, and profit, but they calculate that relationship from different reference points. Getting them mixed up can lead to significant pricing errors that eat into your profitability. Markup is the percentage added to cost to arrive at the selling price. If a product costs GBP 50 and you apply a 100% markup, the selling price is GBP 100. Margin, on the other hand, is the percentage of the selling price that represents profit. In the same example, the margin is 50% because GBP 50 profit out of GBP 100 revenue is half. This distinction matters enormously in practice. A business owner who thinks they are operating on 50% margins when they are actually operating on 50% markup is earning significantly less than they believe. A 50% markup gives a margin of only 33.33%, meaning a third of revenue is profit rather than half. This calculator supports four modes to handle every scenario: you can start with cost and markup, cost and margin, selling price and markup, or selling price and margin. It instantly calculates all the other values, shows the profit amount, and displays a pie chart breaking down the selling price into cost and profit components. For UK retailers, wholesalers, service providers, and freelancers, understanding the markup-to-margin relationship is essential for pricing strategy, profit analysis, and financial reporting. Accountants and bookkeepers frequently need to convert between the two when preparing management accounts or advising on pricing decisions.
To use the markup vs margin calculator: 1. Select your Calculation Mode. Choose based on which values you already know: - "I know Cost + Markup %" if you have a cost price and want to apply a markup - "I know Cost + Margin %" if you have a cost price and a target profit margin - "I know Price + Markup %" if you have a selling price and know the markup applied - "I know Price + Margin %" if you have a selling price and know the profit margin 2. Enter the values you know. Depending on your selected mode, enter the cost or selling price and the markup or margin percentage. 3. Review the results. The calculator shows all five key values: selling price, cost, profit amount, markup percentage, and margin percentage. The pie chart visualises the split between cost and profit within the selling price. 4. Compare scenarios. Change modes or values to see how different pricing strategies affect your profitability. For example, try different markup levels to find the sweet spot between competitive pricing and healthy margins.
The relationship between markup and margin uses these formulas: 1. From Cost and Markup: Selling Price = Cost x (1 + Markup% / 100) Margin% = (Selling Price - Cost) / Selling Price x 100 Example: Cost GBP 50, Markup 100%: Price = 50 x 2 = GBP 100, Margin = 50% 2. From Cost and Margin: Selling Price = Cost / (1 - Margin% / 100) Markup% = (Selling Price - Cost) / Cost x 100 Example: Cost GBP 80, Margin 25%: Price = 80 / 0.75 = GBP 106.67, Markup = 33.33% 3. From Price and Markup: Cost = Selling Price / (1 + Markup% / 100) Example: Price GBP 200, Markup 25%: Cost = 200 / 1.25 = GBP 160 4. From Price and Margin: Cost = Selling Price x (1 - Margin% / 100) Example: Price GBP 100, Margin 40%: Cost = 100 x 0.60 = GBP 60 Key conversion formulas: Margin% = Markup% / (100 + Markup%) x 100 Markup% = Margin% / (100 - Margin%) x 100 Common equivalences: 50% markup = 33.33% margin 100% markup = 50% margin 200% markup = 66.67% margin 25% margin = 33.33% markup 50% margin = 100% markup
When setting prices for a UK business, remember to account for VAT. If you are VAT-registered, your customer-facing price typically includes 20% VAT. Your margin and markup calculations should be based on the VAT-exclusive selling price, since the VAT portion is remitted to HMRC and is not your revenue. Use our VAT Reverse Calculator to extract the net price from a gross amount. For a more comprehensive profitability analysis that considers fixed costs, try the Break-Even Calculator. If you need to calculate the total revenue needed to cover all expenses, combining markup/margin analysis with break-even analysis gives you a complete picture of your pricing strategy.